Why public employment services always fail: double-slided asymmetric information and the placement of low-skill worker in six European countries

It has been a general finding across Europe that very few job matches are facilitated by public employment services (PES).The article explains this failure by highlighting the existence of a double-sided asymmetric information problem on the labour market. It is argued that although a PES potentiall...

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Bibliographic Details
Published inPublic administration (London) Vol. 90; no. 2; pp. 466 - 479
Main Authors Larsen, Christian Albrekt, Vesan, Patrik
Format Journal Article
LanguageEnglish
Published 01.06.2012
Subjects
Depth interviews
Employment
Employment services
Europe
Labour market
Recruitment
State failure
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Summary:It has been a general finding across Europe that very few job matches are facilitated by public employment services (PES).The article explains this failure by highlighting the existence of a double-sided asymmetric information problem on the labour market. It is argued that although a PES potentially reduces search costs, both employers and employees have strong incentives not to use PES. The reason is that employers try to avoid the 'worst' employees, and employees try to avoid the 'worst' employers. Therefore these services get caught in a low-end equilibrium that is almost impossible to escape. The mechanisms leading to this low-end equilibrium are illustrated by means of qualitative interviews with 40 private employers in six European countries. Reprinted by permission of Blackwell Publishers
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
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ObjectType-Feature-1
ISSN:0033-3298
DOI:10.1111/j.1467-9299.2011.02000.x